What can you do if your employer doesn’t offer a 401(k) match?
Some employers encourage employee participation in their retirement plans by offering to match a portion of the funds. For example, many companies will add 50 cents of every dollar up to 6% of an employee’s 401(k) contributions.
But what if your employer’s retirement plan offers a 401(k) without a match? Is there any way you can still beef up your retirement a little more? Here are some ideas:
Crank up the investments available
Take full advantage of what is available to you:
Contribute more – Put a higher percentage of your income into your existing retirement plan. Since it lowers your taxable income, it may be cheaper than you think.
Consider getting taxed up front – Money placed in a Roth IRA is taxed now, but qualified Roth earnings are never taxed. This can save you more money in the long run.
Invest at home
Extra money for investing is often “found” in your house or condo:
Purchase a home – Mortgage interest is usually tax deductible. Plus, any equity you build can be invested in your next house and eventually toward retirement, assuming the value of your home doesn't drop.
Determine the dollar amount of a potential employer match, then consider it part of your overall compensation:
Request a raise – It may or may not work, but it never hurts to ask.
Ask your employer to consider starting a matching program – Remind them it could help attract new talent and increase employee plan participation. HR might listen to good reasoning.
Compare job offers – The next time you interview, ask about all the available benefits, including the employer match. If you’re not offered one, try negotiating a higher salary to make up for the "lost" investment revenue.